Cotton futures closed easier Tuesday on investor profit-taking and liquidation after an initial surge fizzled and analysts feel the market remains pinned in a wide band, brokers said. ICE Futures' July cotton contract fell 1.04 cents to end at 70.77 cents per lb, trading from 70.65 to 72.69 cents. The new-crop December cotton contract slid 0.99 cent to 79.62 cents, dealing from 79.51 to 81.44 cents.
Volume traded in the July contract at 3:07 pm (1907 GMT) was at 18,471 lots while December's tally was at 10,380 lots. "We're in something of a no-man's land right now," said Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia.
He said fiber contracts moved higher in early business on the back of strength in both the grains and crude markets, but the lack of any follow-through buying stopped the advance and shoved it lower.
Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, had said cotton contracts would find support around the area of 70.50 cents, basis July. On a fundamental level, the market's players will be looking toward release of the US Agriculture Department's weekly export sales data on Thursday to further gauge the level of demand for cotton.
The longer-term factor would be the development of the new crop in the months ahead. The trade will also be looking at the start of the annual Atlantic hurricane season on June 1 to see if storms this year would match the damage inflicted by the severe howlers that struck the southern United States in 2004 and 2005.
Brokers Flanagan Trading Corp see resistance in the July cotton contract at 71.25 and 72.50 cents, with support at 70.60 and 69.80 cents. Volume traded Monday reached 15,519 lots, the exchange said. Open interest in the cotton market climbed 1,138 lots to 260,837 lots as of May 19, it added.
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